Steering the Sainsbury’s trolley

Mike Coupe, the new CEO of Sainsbury’s, tells Holly Knight why the supermarket won’t be changing any time soon

Sunday 29 June 2014

Photo Credit: ell brown

This month, Mike Coupe gave the opening speech to a discussion about supermarkets, supply chains and food security, at one of the events hosted by this year’s York Festival of Ideas. Alongside a panel of Bob Doherty, Philip Lymbery and Tim Benton, issues surrounding the security of food were discussed from practical, business, political and ethical perspectives. Before his talk, I was lucky enough to question him about his career and his opinions on issues currently surrounding the supermarket industry.

Despite pursuing a career within the supermarket business, Coupe initially studied physics at the University of Birmingham. “When I grew up in my school year there were very few people that actually went to university” and this therefore meant that “the careers advice from my school advisor was to do what you’re good at. I happened to be reasonably good at physics.”

Coupe began his working life however as a marketing trainee and working for Unilever, and admits to having “stumbled” into the food industry. He tells me that he imagines he was like many people who fell into these roles, “as a result of needing a job, applying for graduate schemes and being fortunate enough to be interviewed and get the role.” A very lucky stumble it would seem, given his progression to the position of CEO at Sainsbury’s, a role that he will inherit from Justin King at the beginning of July.

After his experience at Unilever, Coupe decided that he would “prefer to be buying rather than selling” leading him to the decision to join Tesco in 1986. Since then, he has worked at numerous supermarket chains, including Tesco, Asda and Iceland, eventually becoming Trading Director at Sainsbury’s in 2004. Coupe has certainly had a substantial career within the supermarket industry, but, I wonder, what drew him in?

“Sainsbury’s has been a successful organisation for the last ten years”

“What makes it interesting is you have a genuine impact on people’s day to day lives, whether it’s your employees or the customers that you serve. It’s incredibly fast moving; you can change things today for tomorrow, or tonight for tomorrow, so it’s very dynamic and is constantly evolving.”

Coupe also finds working with the 160,000 or so employees at Sainsbury’s and observing their achievements extremely rewarding. “It never fails to amaze me some of the things that our colleagues actually do with their lives. I meet numerous and very humbling colleagues who are not only massive contributors to the success of our business, but are also big contributors in the societies and communities that they work in.”

Coupe is taking over the role of CEO at Sainsbury’s at an incredibly crucial time. With Sainsbury’s sales falling for the first time in three years and growth progressing at the slowest rate in nine years, now seems like the time to make changes. However, Coupe insists that Sainsbury’s will operate by the same principles that it has done since the business was created in 1869. “Whilst I’m sure we’ll adapt things as we go along, the basic thesis of the business is the same as it was in 1869. The original slogan of the company was ‘quality perfect, prices lower’, and it kind of still holds true 145 years later.”

“Sainsbury’s has been a successful organisation for the last ten years and I would like to think that we can continue that success. It’s based around a core central idea that we’ll offer our customers fantastic prices, but that’s underpinned by a combination of great quality and also a set of core values that run through the organisation; reaching through our supply chains so that we understand where the products that we sell come from, and that we make sure that we emphasise those differences to our customers. In the end, businesses are successful on the basis of what they differentiate themselves on and that’s how we differentiate ourselves.”

Coupe discusses the rise of discount food stores. Photo Credit: RobW_

Coupe’s positivity about the prosperous nature of Sainsbury’s future is evident. However, it is undeniable that problems are arising within the supermarket industry, which will require the attention of all the larger supermarkets.

A particularly pressing issue is the rise of discount stores such as Lidl and Aldi, as customers wish to spend less in the aftermath of the recession. Coupe agrees that the recession has affected the shopping habits of customers and that it has led customers to start shopping around, rather than doing all of their shopping in one place. “People”, he tells me, “actually changed their shopping habits quite dramatically.” However, Coupe does not feel that this will affect Sainsbury’s any differently now than it has done since the recession began and claims that Sainsbury’s just needs to keep doing what it is already doing.

“We still compete in exactly the same way. We’re not going to stop the flow of discounters; they will continue to grow because there is still plenty of room for them to expand. We have to be brilliantly good at the things which we do, which is to be a great quality retailer. Our online business is growing at 10% a year, we’ve got a very successful non-food business, we’ve just bought a bank, we run a mobile phone business and an energy business, so there are a whole bunch of businesses which will grow over time.”

We then move on to discuss the problems of food waste within the UK. Presented with the question as to whether supermarkets contribute to this issue with deals like ‘buy one get one free’, Coupe stated that he feels the situation is over exaggerated by the media. “I would say it’s massively overblown.”

“you have a genuine impact on people’s day to day lives”

“The UK food supply chain is the most efficient in the world and the food waste is the lowest in the world. Some of the comparisons that were made in the newspapers were just misleading because they didn’t take into account the total waste that was produced. So the reason why there is a lot more food given to charities in Spain is because a lot more waste is produced in the first place.”

He does, however, acknowledge the responsibility of supermarkets. “We have a responsibility as a retailer to minimise the waste in our supply chains. We do that by first of all selling it to our customers, so we mark stuff down. We give stuff away to charities like FareShare – we have been a participant in that for the last 20 years, we help to set it up. If we can’t sell it or send it away for human consumption we’ll send it for animal consumption, so we feed monkeys in zoos. And finally, we use all of our waste that’s left over to run anaerobic digestion.” So, he explains, “we currently don’t throw anything away.”

Coupe also feels that waste is created in the home and that the issue depends on how you measure waste. “Of 30% of the food that is wasted, the vast majority is wasted by consumers at home. A lot of it depends on how you measure it – do you count the potato peelings as waste, because that’s how some of the commentators will choose to measure things. Are banana skins waste? Well, I doubt very much if many human beings would want to eat banana skins but, as I say, in the media that is portrayed as part of the waste problem.”

Coupe talks about the problems of food waste in the UK. Photo Credit: greenerleith

To combat this issue, Sainsbury’s has recently unveiled its ‘food rescue’ app in collaboration with google. Through this app, you “plug in what is at the back of your fridge and it throws up a recipe for you”. This app uses “modern technology to twist something that we’ve done, probably all of our lifetime, which is to produce various forms of recipes, helping our customers with how to use their left-overs better.”

Coupe had little to say on the issue of customer trust in light of the meat scandals, given that Sainsbury’s was not involved in any of these controversies. He feels that customers have just as much trust in Sainsbury’s as they ever have. “The reality is our business is more trusted today than it was two years ago because our customers trust us to do the right things for them.”

“I can only speak on behalf of Sainsbury’s. You’d have to ask other supermarkets, but we will of course claim that we’re different to everybody else. We weren’t implicated in the meat scandal and that’s because we pride ourselves on reaching through our supply chains and understanding where the things that we sell come from. Again, it’s one of the central principles of the way that the business is run.”

Finally, Coupe commented on the price wars between supermarkets and its impact on UK farmers and the UK’s self-sufficiency. Coupe claimed that “as of today I don’t meet many poor farmers” but that “it would be delusional and misleading to think that somehow it’s not a competitive market. In the end, the vast majority of our customers demand that we offer them value for money and therefore price is an important issue.” He tells me that “none of us deserve a living unless we are efficient and we are supplying our customers’ needs.”

“our business is more trusted today than it was two years ago”

However, Coupe also marked the importance of sourcing food from the UK to make supply chains more traceable. “We actually have a commitment, our 20 by 20 commitment, to double the amount of British food that we source. This means that we’ve got to significantly change our sourcing arrangements on lots of products and effectively bring a lot more products home. Last year we made a decision to source all of our pork from the UK, at a fairly considerable cost for business. Our customers don’t pay anything more, but we now source all of our products from the UK, because we believe in the round that shorter supply chains are more traceable.”

At the end of the interview, Coupe provided some advice for any students aspiring to follow a similar career. “Find something that you want to do, find something that is your passion, find something that you’re interested in” but have the necessary “technical skills”. For Coupe, when he is interviewing graduates “almost invariably the ones that are more confident, who have more experience and have got something to say about themselves are the ones that get through.” He claims that the most important things to consider when pursuing a career are that “a lot of it is about self-confidence”, that “you need to build advocacy and you need to have people like me on your side” and that finally, you need “luck”.

So, to all students looking to get their foot on this particular career ladder, Mark Coupe wishes you “good luck!”